State Museum left vulnerable to cuts

Several factors combined to create situation that caused decision to lay off 26, close on Sundays

By JIMMY VIELKIND Capitol bureau

Published 12:01 am, Friday, November 26, 2010

Photo: Cindy Schultz

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A school group walks through the New York City exhibit on Tuesday, Nov. 16, 2010, at the State Museum in Albany. The museum is slated to close on Sundays. (Cindy Schultz / Times Union)

A school group walks through the New York City exhibit on Tuesday, Nov. 16, 2010, at the State Museum in Albany. The museum is slated to close on Sundays. (Cindy Schultz / Times Union)

Photo: Cindy Schultz

State Museum left vulnerable to cuts

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ALBANY -- The collapse of the housing bubble, competing state needs and a $20 million "sweep" designed to fund a building on indefinite hold left the State Museum particularly vulnerable as New York's budget swims in red ink.

That vulnerability, people familiar with the facility's finances say, led to a decision earlier this month to lay off 26 workers and, for the first time since 1976, close the museum to the public on Sunday.

Financial records reviewed by the Times Union show $63.7 million was diverted from the Cultural Education Account since it was created in 2002. The account was set up to fund the operations of the Office of Cultural Education -- which runs the State Museum, Archives and Library -- through mortgage recording fees.

The account is projected to end the current fiscal year $9.35 million in the hole, the State Education Department estimated.

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"In this midyear cut, Cultural Ed as a commissioner's decision got hit a little harder than the rest of the offices, and I think it's because of the depending on this account," said James C. Dawson, a geology professor at SUNY Plattsburgh and the regent who, until this summer, was charged with leading the Cultural Education Committee. "If we had been on the general fund, I think, we might have fared a little better."

While state money is state money, there are several accounts dedicated to specific purposes. Their intent, almost invariably, is to protect certain programs from the political ups and downs of the budget cycle and appropriation process.

In the case of the Cultural Education Account, Dawson expressed concern that the revenue stream of mortgage recording fees was disconnected from the spending purpose, but he noted that an equivalent tax on the arts -- a book tax, perhaps, or a surcharge on symphony rehearsals -- wasn't tenable.

Consequently, the money ballooned in good times ($47.6 million in 2004-05) and waned after the onset of the recession ($28.6 million in 2009-10), while operating costs increased slowly.

But rather than setting aside money in the fat years, state leaders raided the fund.

Starting in 2005, the Cultural Education Account was used to subsidize the New York State Theatre Institute, sending $13.8 million to the Troy-based troupe over the past five years. Gov. David Paterson's administration took over NYSTI earlier this year after the state Inspector General concluded that Patricia Snyder, the organization's producing director, engaged in questionable spending and runaway nepotism. NYSTI's production of "A Christmas Carol" next month is expected to be its last.

The account also sent $2.9 million in subsidies to The Egg, and had $7.2 million redirected to the state's general fund between 2002 and 2008.

Erik Kriss, a spokesman for the Division of the Budget, said the transfers were consistent with the fund's mission and should not be considered sweeps. He said the $7.2 million was used to offset the costs of higher education programs run by the museum, and that the fund "was not targeted for any General Fund 'sweeps.'"

But there was a $20 million appropriation in 2006 for a facility that never materialized.

In addition to what's on display in the museum's Madison Avenue building, additional artifacts are stored in a warehouse in Rotterdam that lacks modern climate controls. So $20 million was swept from the fund to partially fund the construction of a new facility; the drawdown in the Cultural Education Account was exchanged for a $60 million line in the capital budget. A board was charged with overseeing the construction as well as another $20 million in renovations to the museum, but that body was slow to constitute, and by the time it did come together the money had dried up.

"I don't know if 'dead' is the right word, but I'd say there's a hesitation," said John Egan, a member of the construction board and the recently retired commissioner of the Office of General Services. " ... It's a major expenditure and like so many projects it's -- as far as I know -- on hold."

"It had taken a long time to get to the point of agreeing on the site, and by the time they agreed on the site, the state was mired in this fiscal mess," said Professor Jeffrey Kraus, associate provost of Wagner College on Staten Island and another member of the board. He traveled three hours to Albany this April for a 10-minute meeting.

"From the impression I got at that meeting, there wouldn't be another one anytime soon," Kraus said.

Kriss said the project is "under development," but provided no further details.

Jane Briggs, a spokeswoman for the State Education Department, said "given the economic downturn and the OCE account deficit, and the fact that the projects are currently suspended, it would be beneficial to have access to the funds that were swept in the past."

Dawson, the regent, acknowledged that it's not just the museum facing a squeeze.

"Do I like it? No, I don't like it. Nobody likes it -- but it's the reality of upstate finances at the end of 2010, and I think it's going to be worse in 2011," he said. "We're just going to have to face those realities."

Tom Dunn, another Education Department spokesman, provided attendance data showing more people visit the museum on Sunday than any other day except Saturday during months when school is in session. (The numbers are different during summer months.)

People like Assemblyman Jack McEneny, D-Albany, are hoping some solution can be found to keep the museum open both weekend days while closing on a weekday. Under current law, the library must be open Monday through Friday, and Dunn said Sunday was selected for the closure so the entire building could be shut down.

"There's a lot of painful things that were done," McEneny said. "When I went to work last year, particularly after April 1, it was, 'Which bad decision will I have to make today?'"

The Sunday closure takes effect Jan. 2.

Gov. David Paterson said he was sympathetic to the problem, but absent new money didn't see how the closure could be avoided.

"People who work can't get to the State Museum often during the weeks, and it's just another one of those painful remedies to a deficit that we would have to undergo," he said.